Consumers expect brands to understand them. Now more than ever, people interact with brands on an intimate, human level through social media and other channels. But how well do you actually know your audience and what they want? Customer insights provide valuable information so your team can understand those needs and expectations.
In this article, we explore customer insights , how they differ from market research, and why these insights are important for your business strategy.
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- Market research and customer insights provide a similar overview of the market. The difference is customer insights focus on consumer behavior and purchasing decisions rather than raw numerical data.
- Customer insights provide valuable information about every stage of the customer’s journey so brands can find opportunities for touchpoint improvement.
- By leveraging customer insights, businesses determine optimal price points, create personalized marketing campaigns, improve customer retention, maximize customer lifetime value, accurately forecast inventory needs, and analyze overall market performance.
What Are Customer Insights and Why Are They Important?
Customer insights— also referred to as consumer insights— are the interpretation of human behavioral trends so businesses can understand how an audience thinks and feels. The intended purpose of this data is to guide business strategies, decisions, forecasting, product development, customer experience, or marketing initiatives.
Market research, in comparison, is used to collect information about customers or markets. While these two analytical methods deliver similar results, market research provides raw data and statistics to show what is happening in the market while customer insights illustrate why those changes are happening.
For example, market research shows us that global digital customer interactions rose by 22% from December 2019 to July 2020.
Customer insights take a deeper dive to explore what factors drove the consumer behavior, including COVID-19 surges, safety concerns, convenience, etc.
Understanding what drives trends can help businesses become proactive rather than reactive to the fluctuating market. Companies use customer insights to answer fundamental questions and improve:
- Customer care strategy
- Marketing campaigns
- Brand awareness and perception
- Conversion rates
- Product launches
- Brand messaging and tone
6 Ways to Use Customer Insights to Improve Your Business Strategy
There’s no question that customer insights are important, but how can businesses apply this data? Here are six ways your brand can use customer insights:
1. Improve the Customer Journey
By analyzing customer insights, companies can map the consumer’s journey from initial brand awareness all the way to post-purchase experiences.
Companies that fully understand how customers interact with the brand at various digital and physical touchpoints are better equipped to audit their processes, develop effective sales funnels, identify pain points, and improve the overall customer journey for a positive experience.
2. Create Personalized, Targeted Marketing Campaigns
Did you know that 84% of millennials don’t trust traditional advertising? Newer generations have turned away from traditional marketing methods that feel disruptive and impersonal.
Instead, Gen Z and millennials prefer native, engaging content that feels authentic. When a brand offers personalized experiences, consumers are 80% more likely to make a purchase. To achieve that level of personalization, businesses need to have a thorough understanding of their audience and demographic.
What kind of messaging will resonate with your target audience? Should you prioritize ESG, diversity, and inclusion for a younger, socially conscious demographic? Or should your marketing campaigns focus on consumer centricity? Do your customers want to shop local and support small businesses, or are they more interested in popular brand names?
Customer insights provide the information brands need to shift away from generic mass marketing campaigns and take a more targeted, personalized approach that appeals to their unique audience.
3. Determine Optimal Price Points
How much are customers willing to pay for your products or services?
Overvaluing your goods will turn some consumers away, while charging too little means you’re losing extra revenue your customers would have gladly paid.
Customer insights help your team understand optimal pricing to maximize revenue. They also reveal opportunities to increase the value of what you’re offering to customers. For example, 86% of buyers are willing to pay a higher price for a great customer experience.
Consider how your team can use customer insights to improve product design, customer care, website navigation, and other components that impact a consumer’s experience with your business. The more value you add, the more your brand and its subsequent products and services are worth.
4. Maximize Customer Retention and Lifetime Value
Analytical data is valuable for more than just targeting new customers. It also helps the business understand its existing base to improve overall retention. With customer insights, businesses can improve retargeting campaigns, encourage engagement, and stay top-of-mind to drive up the total customer lifetime value.
This data also helps business teams identify potential issues that may be causing new buyers to be one-time customers. Armed with this information, companies can make informed decisions to turn those tentative customers into loyal, long-term brand supporters.
5. Improve Forecasting and Inventory Planning
Sales data collected with consumer insights improve forecasting so the business can operate with a small, efficient inventory. Maintaining accurate inventory levels benefits businesses by:
- Reducing excess products and waste
- Minimizing markdowns to move old products
- Promoting efficient storage space utilization
- Reducing unnecessary storage costs
6. Analyze Market Position and Performance
Remember that customer insights shed light on the reasons behind trends while market research provides data on what is happening in the market. Combining this data enables businesses to understand the market and evaluate their position within the industry.
For those looking to expand into new markets, customer insights are a crucial part of the research and preparation phase so a business enters new territory with the best chance for success. These insights also help companies set criteria to determine when they should pull out of low-performing markets and shift their focus elsewhere.
Use Customer Insights to Make Better Business Decisions
Customer insights provide invaluable analytical data that impact marketing, sales, product development, inventory, and customer experience so the company has enough data and knowledge to make informed decisions on every business front.
Televerde uses this same all-encompassing approach. We create a seamless omnichannel experience while reducing organizational silos across departments. We offer solutions for every stage in the customer journey. Request a consultation to learn more about how we can help your business use customer insights to optimize your brand’s strategy.
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